Technology “key” to attract FDI

Economic experts also said the focus on the technology sector is extremely necessary to achieve Vietnam’s goal of industrialization and modernization by 2045.

Attracting foreign direct investment in the high-tech sector is also urgent in the current context because according to Phan Huu Thang, Chairman of the Vietnam Industrial Park Finance Association (VIPFA), despite the bright spots in Vietnam’s FDI picture in 2023 and in the first nine months of 2024, in an overall view, Vietnam is still facing many challenges in attracting and managing foreign investment flows in the long-term.

Vietnam aims at attracting FDI in the high-tech sector

Specifically, in 2023, the FDI sector contributed about US$18.3 billion to the state budget, accounting for 25.4 percent of Vietnam’s total state budget revenue. Exports (including crude oil) of the sector reached more than US$259.1 billion, accounting for 73.1 percent of the country’s total export turnover. The FDI sector had a trade surplus of nearly US$50.1 billion including crude oil, offsetting a trade deficit of nearly US$21.8 billion of domestic enterprises, and helping the country gain a trade surplus of US$28.3 billion.

However, Thang said the proportion of FDI projects focusing on the high-tech sector is still limited. Most FDI projects are small in scale due to the lack of preferential policies to attract investors in high-tech, innovation, etc., especially the shortage of high-quality labor. “These are the biggest obstacles for Vietnam when attracting FDI in this field. If they are solved, the FDI capital flows will be more effective,” he said.

According to Nguyen Van Toan, Vietnam is considered one of the countries with great opportunities in attracting investment in the high-tech sector and developing the semiconductor industry. However, to turn these opportunities into reality, Vietnam needs to issue more specific policies to promote FDI attraction.

Associate Professor, Dr. Nguyen Mai - Chairman of the VAFIE - said thanks to geopolitical advantages, economic openness, human resources as well as the initial foundation of the electronic semiconductor industry built over the past nearly 20 years, Vietnam is considered a potential destination in attracting FDI in the high-tech sector. However, to achieve the above goals, Vietnam needs to focus on perfecting institutions and laws; enhancing endogenous potential; modernizing socioeconomic infrastructure; and promoting national administrative reform.

More specific policies are needed to attract FDI in the high-tech sector

According to the Foreign Investment Agency, Vietnam’s orientation to attract FDI in the coming time will focus on a number of factors, with special attention paid to strengthening investment in high-tech and innovative areas such as artificial intelligence, smart supply chains, renewable energy and green technology.

To achieve the above goals, Vietnam will keep implementing eight solutions, as follows:

First, stabilizing the macro economy;

Second, implementing the three strategic breakthroughs of institutions, infrastructure, and human resources;

Third, completing policies, simplifying administrative procedures to continue improving the investment and business environment;

Fourth, promoting digital transformation, green transformation, energy transformation, innovation, and operating information technology infrastructure to serve the people and businesses;

Fifth, strengthening dialogues with investors to remove difficulties;

Sixth, issuing policies to effectively and flexibly adapt to the impact of the Global Minimum Tax and Qualified Domestic Minimum Top-up Tax (GMT - QDMTT);

Seventh, encouraging investment in renewable energy projects, implementing the direct electricity purchase and sale mechanism relating to the National Power Development Plan VIII; and

Eighth, training high-quality human resources, including 100,000 engineers for the electronics and 50,000 engineers for the semiconductor industry.